EV Startup BluSmart Halts Operations Amid SEBI Probe Over Misuse of ₹900+ Crore EV Loan

EV startup BluSmart ceased its cab services throughout Delhi-NCR, Bengaluru, and Mumbai this week. This occurred amid a growing financial scandal involving its founders Anmol Singh Jaggi and Puneet Singh Jaggi. The sudden halt came after a SEBI Probe was launched into alleged misuse of public funds meant for EV procurement. Users are left stranded, and employees are without timely salaries.

The clean energy boom in India had made BluSmart beneficial. According to Reuters, the crisis has now raised serious concerns about governance and financial transparency in India’s EV startup space.

BluSmart Suspends its Operations Amid Financial Crisis

BluSmart was well-liked, especially for airport trips, because of its clean cars and reliable service. Unlike other platforms, BluSmart drivers were not allowed to cancel rides. Now, even Delhi Airport has put out a notice about BluSmart’s suspension. Thousands of drivers now find themselves jobless while people seek answers regarding the company’s situation.

BluSmart disabled new booking actions through their mobile application. Through its email message to customers on Thursday BluSmart disclosed their decision to pause all app bookings but failed to provide any details about the reason. Many customers shared concerns about their money in the BluSmart wallets.

“We truly appreciate your support. While we strive to be back soon, we will initiate a refund within 90 days if services do not resume before that,” an email from the company said.

SEBI Probe Reveals Misuse of EV Funds by BluSmart Founders and Gensol

On April 15, SEBI launched a major investigation into BluSmart co-founders Anmol Singh Jaggi and Puneet Singh Jaggi. The regulator said the two founders misused money that was supposed to be used for buying electric vehicles. Instead, they allegedly used ₹26 crore to buy a luxury apartment in DLF’s The Camellias, an upscale residential project in Gurugram.

The money was moved through several indirectly linked companies. One was called Capbridge, which paid ₹42.94 crore to DLF. SEBI also flagged a ₹5 crore advance paid by the founders’ mother, Jasminder Kaur, to DLF. When the builder returned this money, it was not sent back to Gensol—the original source—but instead redirected to another related entity, raising more suspicion.

Gensol Engineering, the company that supports BluSmart’s EV fleet, is also involved in the case. Between 2021 and 2024, Gensol took ₹977.75 crore in loans from public lenders like IREDA and Power Finance Corporation (PFC). Out of this, ₹663.89 crore was marked for buying 6,400 electric vehicles for BluSmart. However, only 4,704 vehicles worth ₹ 567.73 crore were delivered, according to both Gensol’s own filings and the vehicle supplier Go-Auto. This led to an unexplained shortfall of around ₹262.13 crore. SEBI believes a portion of this missing amount was diverted for personal gains by the founders.

The SEBI investigation into BluSmart focuses heavily on the complicated money transfers along with inconsistencies in vehicle distribution. Corporate governance issues and fund misuse, now present a major concern in the Indian EV startup sector.

Founders Barred as SEBI Intensifies Investigation

As part of its crackdown, SEBI has banned BluSmart co-founders from participating in the securities market until further notice. The regulator initiated disciplinary action against the company when they discovered major financial irregularities. This included public and investor fund misuses.

SEBI plans to continue its deeper investigation into all entities connected to the fund flow. The government enquiry will investigate both public loan management procedures and business connections among affiliated companies.

The recent SEBI decision places even more pressure on BluSmart and Gensol. Both companies have already dealt with public questioning and service outages while facing increasing investor scepticism.

Investors Shocked, Directors Resign

The SEBI probe into BluSmart has sent shockwaves through the startup’s high-profile investors. MS Dhoni, and Deepika Padukone, are among the major figures who have backed the electric ride-hailing company. Ashneer Grover, the former BharatPe co-founder was once an investor. His association with BluSmart now raises questions about his judgment.

The financial effects have appeared rapidly after the incident. Gensol Engineering saw a 5% drop in its stock price after the SEBI news broke. The stock hit a lower circuit limit, falling to ₹122.68 per share.

Adding to the crisis, several BluSmart directors have resigned in the wake of the investigation. The departures have raised doubts about the startup’s leadership and its ability to recover from this scandal. BluSmart’s uncertain future worsens as media attention intensified since two directors chose to resign during this critical time.

“I was hopeful that the company that has grown so fast and had been enjoying good reputation and good will, will continue to grow… and governance issues as brought out will be addressed. However, that has not happened.” Kuljit Singh Popli stated this in his letter of resignation as independent director of Gensol Engineering.

BluSmart Rebrands as ‘Uber Green’ in Bengaluru

BluSmart’s crisis has taken a new turn with its rebranding as ‘Uber Green’ in Bengaluru. Although BluSmart has not officially confirmed a partnership with Uber. Reports suggest the company is in discussions to lease 8,000 – 10,000 electric vehicles (EVs) under the Uber Green brand.

Operations in Bengaluru have been temporarily suspended. This is part of an ongoing audit of its fleet. Around 200 cabs are sitting idle. The company has assured drivers that once the audit is complete, the cab service will resume.

Despite the financial and regulatory chaos, BluSmart is trying to manage the crisis. They are working to keep operations running. The company’s ability to make a full comeback remains uncertain. The SEBI probe together with potential business partnerships will determine the future of the company.